Cryptocurrency markets are closely watching the US Consumer Price Index (CPI) data release for potential volatility. Here's a breakdown of the current price action and potential future movements for Bitcoin, Ethereum, and Ripple:
Bitcoin (BTC)
Bitcoin's price is hovering around $82,700 on Wednesday, following a 5.52% recovery from the previous day.
- Potential Support: $78,258 (February 28 low). A close below this level could lead to a further decline to $73,072.
- Potential Resistance: $85,000.
- RSI Indicator: The Relative Strength Index (RSI) is currently at 40 and trending upwards, suggesting a fading bearish momentum. A sustained recovery requires the RSI to move above 50.
Ethereum (ETH)
Ethereum's price is showing weakness, currently trading around its weekly support level of $1,905.
- Potential Support: $1,905. A close below this level could extend the correction to $1,700.
- Potential Resistance: $2,359.
- RSI Indicator: The RSI is at 32 and trending downwards, indicating strong bearish momentum.
Ripple (XRP)
Ripple's price is showing signs of recovery, trading around $2.20.
- Potential Support: $1.96. A close below this level could lead to a decline to $1.77 (February 3 low).
- Potential Resistance: $2.72.
- RSI Indicator: The RSI is at 44 and trending upwards, suggesting fading bearish momentum. A sustained recovery requires the RSI to move above 50.
Crypto FAQs
Bitcoin, Altcoins, Stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.